- banks and the rally,
- the real tech move, and
- Amazon's savvy shoe deal.
We Can't Lose the Banks Here
Posted at 3:50 p.m. EDT, July 21, 2009 I am never going to go against Helene Meisler on the banks. That group is one of the three pillars of the earlier move in this market, the one off the bottom in March, along with tech and oil. I know we need that group even as we managed to rally without it late in the day. But we can't afford to have the banks go bad on top of oil, even if we picked up health care courtesy of a faltering plan by President Obama and we revved up the industrials courtesy of cost cuts at PPG Industries ( PPG), Eaton ( ETN) and now Caterpillar ( CAT). Now it looks like we are losing the banks even as I haven't seen anything I wasn't expecting. We knew JPMorgan Chase ( JPM) and Goldman Sachs ( GS) were going to be great and that the regionals had it tough. We are coming back to the notion that perhaps the FDIC should have forced Regions Financial ( RF) or KeyCorp ( KEY) or some of the other faltering banks to merge a la 1990 when they didn't have any choice. Or at least we broke up the losers and gave them to winner banks like Fulton Financial ( FULT) or Glacier Bancorp ( GBCI) or FirstMerit ( FMER). I have already said that Wells Fargo ( WFC) could reverse the fortunes of the group. But I also acknowledge that we will stall out here if we lose oil and banks because we cannot advance forever with tech, health care and industrials, even as I like those stocks as winners going forward. We need the banks for a broad-based rally. We can rally narrowly without them, but that's not one that we can be excited about. At the time of publication, Cramer was long Wells Fargo, JPMorgan, Goldman Sachs and PPG.
